Handling hidden business expenses
As the world works to restore a healthy economy, Canadian business owners are doing their part to ensure the well-being of their own company finances. Finding and managing hidden expenses is one way to improve those fortunes.
Try exploring these three hidden expense categories for possible savings.
Industry Association fees
Belonging to an organization that does good work on behalf of your industry (such as the Canadian Federation of Independent Business) may be well worth the annual membership fee. However, you may not be enjoying such a good return from the fees paid to other groups.
• Like the monthly gym membership some people never use, scrutinize your involvement with any organization that charges you to belong.
• Investigate your options. Is it necessary to be a member? Can you belong at a lower level? Do they permit non-members to attend certain functions that remain important to you, such as an annual conference? You may be surprised what a group may do to keep you involved.
Some business owners are caught by surprise when something important breaks. It could be an office chair, a front window, or the colour printer.
There’s two ways to go: Set aside a reasonable annual budget for repairs (based on historical events or industry standards) and pay-as-you go. Or, buy insurance, warranties, and subscriptions to maintenance and repair programs.
• For example, it may be more economical to take the $20 extended warranty offered by the retailer who sold you that new printer than to risk a repair bill later.
Every business requires the services of qualified specialists. There are some things the business owner just shouldn’t try to do themselves – like reviewing a lease agreement for commercial space, or replying directly to audit questions presented by the Canada Revenue Agency. Your lawyer and your accountant are best qualified to handle these and other situations requiring subject matter expertise.
Aside from scheduled work (like filing your tax return), professional fees may pop up unexpectedly to hurt your budget. Bring fees under control by:
a) Asking about hourly fees. You may be shocked at the hourly rates professionals charge. Ask in advance of assigning any work, so you can have a conversation with the professional about project-based fees. Or, if the fees are simply too high, shop around for another supplier.
As your business grows your ability to manage all costs will likely diminish because of increased demands on your time and attention. Consider assigning the responsibility for periodically checking on hidden costs to someone else within your organization, such as an employee, your bookkeeper or your accountant.
Scotiabank has just launched an exciting new resource to help you find hidden expenses in your business and explore cost-saving options. Check out the interactive Better Business Banking Tool to save time, save money and prepare your business for growth.
Have you discovered any hidden costs recently? Please share your experience with other business owners in the comments section below.
By Roger Pierce